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The following is a guest blog post by David Houlding MSc CISSP CIPP, Principal Healthcare Industry Lead at Microsoft Health working specifically on the Azure Team.

The hardest thing about blockchain is not the technology. To be clear, there are many technical challenges that must be addressed to be successful with blockchain, and these are not trivial. However, even harder is building the network of healthcare organizations and trust to a point where they are willing to participate, connect, and transact.

Existing B2B Healthcare Networks

It is faster to apply blockchain to an existing B2B network of healthcare organizations than to build a new network around a new use case from scratch. This is why blockchain is first taking hold in healthcare in existing B2B networks where healthcare organizations already transact around a use case, albeit with a conventional “hub-and-spoke”, centralized architecture with a trusted intermediary. In some cases, these existing B2B networks are looser, with healthcare organizations collaborating ad-hoc as needed, even via antiquated technologies such as faxes, rather than fully automated and integrated systems.

Cost Reduction Value Prop

These business value propositions are driving blockchain forward in healthcare:

Improving patient outcomes

Reducing healthcare costs

Improving patient experience, and engagement

Improving healthcare worker experience

Amongst these, those that have a strong cost reduction value proposition have the most interest from healthcare organizations—most want to see a strong near-term ROI justification for participation.

Leading Use Cases for Blockchain in Healthcare

In this article I highlight 5 practical use cases—plus one emerging use case—where blockchain is taking hold. Here are the ways that blockchain is adding value in these networks:

Decentralization, avoiding the need for a central hub (and associated costs, delays, and single point of failure).

Improving trust through a shared immutable ledger.

Mitigating fraud through transparency of transactions.

Improving performance and efficiency.

Paving the way for new levels of automation and collaboration around smart contracts and DAOs (Decentralized Autonomous Organization).

1. Health Information Exchange

Currently, the healthcare industry experiences major inefficiencies due to diverse, uncoordinated and unconnected data sources and systems. Effective care collaboration is vital to improve healthcare outcomes. With digitized health data, the exchange of healthcare information across healthcare organizations is required.

Grapevine World is one of the leaders in the application of blockchain technology. They make use of the IHE methodology for interoperability, and multiple blockchains for tracking data provenance and providing a crypto token as means of exchange within their ecosystem.

2. Provider Directory

Healthcare organizations, including payers, must maintain directories of healthcare providers, or doctors. Today this is done redundantly across multiple organizations. Further, if these directories get out of sync, it can lead to issues such as claims bouncing. Through blockchains, provider directories can be maintained by various healthcare organizations in a shared, decentralized ledger. This reduces redundancies and inconsistencies, and thereby improves operational efficiencies (including around claims adjudication).

Optum is one of the leaders in applying blockchain technology to the directory use case.

3. Provider Credentialing

Doctors, nurses, and other healthcare workers must have credentials to provide healthcare. These credentials must be validated by every healthcare organization they practice at, and periodically thereafter, usually every two years. This creates a huge amount of redundant effort and cost, and often delays a doctor’s ability to practice at a new facility. Blockchain provides a way for healthcare organizations in a consortium to update doctors’ credentials. That includes the validations of those credentials, helping to eliminate redundant effort. Doctors will be able to practice at new facilities with minimal delay.

ProCredEx and Hashed Health are leaders in the application of blockchain technology to the provider credentialing use case.

4. Drug Supply Chain

Medications must be tracked from manufacturers (such as the big pharmaceuticals), through distributors, to dispensaries (such as pharmacies). This enables the pharmacist, patient, or family caregiver to verify the authenticity, provenance, and safety of the product. It helps reduce drug counterfeiting and enables improved operational efficiencies, with associated cost reductions. Blockchain is particularly well suited to applications that require tracking of items across organizations. Regulations such as DSCSA also require tracking of drugs through the supply chain. And compliance with these regulations provides an additional incentive, or forcing function for the adoption of blockchain.

Adents and the C4SCS (Center for Supply Chain Studies) are leaders in the application of blockchain technology to the drug supply chain use case.

5. Medical Device Track and Trace

This is another example of a supply chain use case; except medical devices are being tracked, rather than drugs. Devices can range from implantables to MRI machines. The idea is to track these across the supply chain and throughout their life cycles, or even multiple life cycles as they are resold and reused. Such tracking enables fast response to recalls, thereby improving patient safety and operational efficiency. It enables one to monitor the maintenance of these devices over their lifetime—which can also help improve quality, and patient outcomes.

Spiritus Partners is a leader in the application of blockchain technology to the medical device track and trace use case in healthcare.

Emerging: Anti-Fraud

Anti-fraud is another use case that is starting to take hold in healthcare. It is interesting both as a stand-alone use case (of particular interest to healthcare payers), and as a more general business value enabled by blockchain. Fraud prevention is attractive across most other use cases for blockchain in healthcare. For example, blockchain can help mitigate counterfeiting fraud in the drug supply chain use case. Blockchain has major potential to block fraud through:

What other use cases do you see blockchain being applied to in healthcare? Welcome any comments, questions, or feedback you may have below. Blockchain in healthcare is fast evolving. I post updates extensively for blockchain in healthcare. Reach out to me on LinkedIn or Twitter.

About David HouldingDavid Houlding is the Worldwide Healthcare Industry Leader on the Microsoft Azure Industry Experiences Team. David has more than 24 years of experience in healthcare spanning provider, payer, pharmaceutical, and life sciences segments worldwide, and has deep experience and expertise in blockchain, privacy, security, compliance, and AI / ML, and cloud computing. David also currently serves as Chair of the HIMSS Blockchain in Healthcare Task Force, a group of 50+ leaders from across healthcare worldwide, collaborating to advance blockchain in healthcare.

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